If the debt ceiling is not lifted, the treasury has enough revenue to service US debt, and the Constitution guarantees bondholders will get paid first. US bonds will become a limited supply commodity and that's why treasuries are not selling off. They will become more expensive driving interest rates lower, which is bullish. A federal government without capacity to borrow or increase revenues will have no other option but reduce spending therefore reducing the deficit, and that's good for its solvency and its ability to service its debt. I don't see any reason why rating agencies should downgrade US debt, on the contrary if there's no debt deal they should upgrade it, if it were possible. A downgrade would mean they are sellouts bought and paid for by democrat lobbies. I think the media is playing along with the democrats threatening with economic and financial Armageddon if the House doesn't give them the ability to spend their way into bankruptcy just like Greece and the PIIGS. Their accusations of republican obstructionism are hilarious since they have been doing all the obstructionism for months and not doing any counteroffer proposal. The most notorious example is the POTUS rejecting the bipartisan consensus bill last friday, and then he says the next week he wants a bipartisan bill? Ridiculous. Now we know why, the democrats have been all along manufacturing a crisis to get leverage in order to force the House to give them what they want at the very last minute. This is very irresponsible. A deal would mean giving a reward to this kind of destructive maneuvers, that's why you don't negotiate with terrorists or kidnappers. Therefore it would be better for America if there's no deal.